THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A COMMON STOCK PURCHASE
AGREEMENT DATED AS OF DECEMBER 7, 2000, NEITHER THIS WARRANT NOR ANY OF
SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR
AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Right to
Purchase
4,972,370
Shares of Class A
Common Stock,
par value $.01
per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC International Investors,
LDC ("RGC") or its permitted assigns, is entitled to purchase from Teligent,
Inc., a Delaware corporation (the "Company"), at any time or from time to time
as prescribed herein during the period specified in Section 2 hereof, Four
Million Nine Hundred Seventy-Two Thousand Three Hundred Seventy (4,972,370)
fully paid and nonassessable shares of the Company's Class A Common Stock, par
value $.01 per share (the "Common Stock"), at an exercise price of $3.62 per
share (the "Exercise Price"). The term "Warrant Shares," as used herein, refers
to the shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Section 4 hereof. The
term Warrants means this Warrant and the other warrants issued pursuant to that
certain Common Stock Purchase Agreement, dated December 7, 2000, by and among
the Company and RGC (the "Stock Purchase Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set
forth in the Stock Purchase Agreement.
This Warrant is subject to the following terms, provisions, and
conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") (or, if after the registration statement covering the Warrant
Shares is declared effective, sales of the Warrant Shares may not be made
thereunder for any reason), delivery to the Company of a written notice of an
election to effect a "Cashless Exercise" (as defined in Section 12(c) below) for
the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of business on the
date on which this Warrant shall have been surrendered, the completed Exercise
Agreement shall have been delivered, and payment shall have been made for such
shares (or an election to effect a Cashless Exercise has been made) as set forth
above. Certificates for the Warrant Shares so purchased, representing the
aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
Notwithstanding anything in this Warrant to the contrary, in
no event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the rights or obligations of the Buyer to
purchase securities from the Company under the Stock Purchase Agreement) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 9.9% of the then Outstanding Shares (as
defined in the Stock Purchase Agreement). For purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (i) hereof.
Notwithstanding anything in this Warrant to the contrary, the limitation on
exercise of this Warrant set forth in this paragraph shall not be amended
without (a) the written consent of the holder hereof and the Company and (b) the
approval of the holders of a majority of the Company's Common Stock present, or
represented by proxy, and voting at any meeting called to vote on the amendment
of such restriction.
2. Period of Exercise; Vesting. Subject to the vesting provisions
contained below, this Warrant is exercisable at any time or from time to time on
or after the date on which this Warrant is issued and delivered pursuant to the
terms of the Stock Purchase Agreement (the "Issue Date") and before 5:00 p.m.,
New York City time, on the fifth (5th) anniversary of the Issue Date (the
"Exercise Period"). In no event shall the holder be entitled to purchase a
number of shares upon exercise of the Warrant which, when aggregated with all
prior purchases of shares upon exercise of this Warrant, exceeds the then vested
portion of this Warrant hereunder. This Warrant shall vest as to (i) 75% of the
aggregate number of shares of Common Stock issuable upon exercise of this
Warrant immediately on the Issue Date and (ii) after the holder has purchased
from the Company Common Stock with an aggregate Purchase Price (as defined in
the Stock Purchase Agreement) of One Hundred Fifty Million Dollars
($150,000,000) pursuant to the Stock Purchase Agreement, an additional
percentage of the shares of Common Stock issuable upon exercise of this Warrant
shall vest simultaneously with each additional Draw Down (as defined in the
Stock Purchase Agreement) of Common Stock pursuant to the Stock Purchase
Agreement. The additional percentage of the aggregate number of shares of Common
Stock issuable upon exercise of this Warrant which shall vest in accordance with
clause (ii) of the preceding sentence shall equal (x) the Investment Amount (as
defined in the Stock Purchase Agreement) relating to each such additional Draw
Down, divided by (y) Two Hundred Fifty Million Dollars ($250,000,000).
3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.
(b) Reservation of Shares. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.
(c) Listing. The Company shall promptly secure the listing of
the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance
upon exercise of this Warrant) and shall maintain, so long as any other shares
of Common Stock shall be so listed, such listing of all shares of Common Stock
from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital stock of the Company issuable upon the exercise of this Warrant if
and so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.
(d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.
(e) Successors and Assigns. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.
4. Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Section 4.
In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.
(a) Adjustment of Exercise Price and Number of Shares upon
Issuance of Common Stock. Except as otherwise provided in Sections 4(c) and 4(e)
hereof, if and whenever on or after the Issue Date of this Warrant, the Company
issues or sells, or in accordance with Section 4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the
Market Price (as hereinafter defined) in effect on the date of issuance (or
deemed issuance) of such Common Stock (a "Dilutive Issuance"), then immediately
upon the Dilutive Issuance, the Exercise Price will be reduced to a price
determined by multiplying the Exercise Price in effect immediately prior to the
Dilutive Issuance by a fraction, (i) the numerator of which is an amount equal
to the sum of (x) the number of shares of Common Stock actually outstanding
immediately prior to the Dilutive Issuance, plus (y) the quotient of the
aggregate consideration, calculated as set forth in Section 4(b) hereof,
received by the Company upon such Dilutive Issuance divided by the Market Price
in effect immediately prior to the Dilutive Issuance, and (ii) the denominator
of which is the total number of shares of Common Stock Deemed Outstanding (as
defined below) immediately after the Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Section 4(a) hereof, the
following will be applicable:
(i) Issuance of Rights or Options. If the Company in
any manner issues or grants any warrants, rights or options, whether or
not immediately exercisable, to subscribe for or to purchase Common
Stock, or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to
purchase Common Stock or Convertible Securities are hereinafter
referred to as "Options") and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the
Market Price in effect on the date of issuance or grant of such
Options, then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Options will, as of the date of
the issuance or grant of such Options, be deemed to be outstanding and
to have been issued and sold by the Company for such price per share.
For purposes of the preceding sentence, the "price per share for which
Common Stock is issuable upon the exercise of such Options" is
determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or granting
of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all
such Options, plus, in the case of Convertible Securities issuable upon
the exercise of such Options, the minimum aggregate amount of
additional consideration payable upon the conversion or exchange
thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Exercise Price will be made upon the actual
issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon
exercise of such Options.
(ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same are
issuable upon the exercise of Options) and the price per share for
which Common Stock is issuable upon such conversion or exchange is less
than the Market Price in effect on the date of issuance of such
Convertible Securities, then the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For the
purposes of the preceding sentence, the "price per share for which
Common Stock is issuable upon such conversion or exchange" is
determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or sale of
all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common
Stock upon conversion or exchange of such Convertible Securities.
(iii) Change in Option Price or Conversion Rate. If
there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any Options;
(ii) the amount of additional consideration, if any, payable to the
Company upon the conversion or exchange of any Convertible Securities;
or (iii) the rate at which any Convertible Securities are convertible
into or exchangeable for Common Stock (other than under or by reason of
provisions designed to protect against dilution), the Exercise Price in
effect at the time of such change will be readjusted to the Exercise
Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold.
(iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of
Common Stock issuable upon exercise of any Option or upon conversion or
exchange of any Convertible Securities is not, in fact, issued and the
rights to exercise such Option or to convert or exchange such
Convertible Securities shall have expired or terminated, the Exercise
Price then in effect will be readjusted to the Exercise Price which
would have been in effect at the time of such expiration or termination
had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in
respect of the actual number of shares of Common Stock issued upon
exercise or conversion thereof), never been issued.
(v) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued, granted or
sold for cash, the consideration received therefor for purposes of this
Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or incurred by the Company
in connection with such issuance, grant or sale. In case any Common
Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount
of the consideration other than cash received by the Company will be
the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date
of receipt. In case any Common Stock, Options or Convertible Securities
are issued in connection with any acquisition, merger or consolidation
in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation
as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined in good faith by (a)
the mutual agreement of the Board of Directors of the Company and a
majority-in-interest of the holders of the outstanding Warrants or (b)
if the Board of Directors of the Company and a majority-in-interest of
the holders of the outstanding Warrants are unable to agree pursuant to
the preceding clause (a), an independent investment bank or a "Big
Five" independent public accounting firm, in either case, of nationally
recognized standing in the valuation of businesses similar to the
business of the Company, and mutually acceptable to a
majority-in-interest of the holders of the outstanding Warrants and the
Company.
(vi) Exceptions to Adjustment of Exercise Price. No
adjustment to the Exercise Price will be made (i) upon the exercise of
any warrants, options or convertible securities granted, issued and
outstanding on the date of issuance of this Warrant; (ii) upon the
grant or exercise of any stock or options which may hereafter be
granted or exercised under any employee benefit plan of the Company now
existing or to be implemented in the future, so long as the issuance of
such stock or options is approved by a majority of the independent
members of the Board of Directors of the Company or a majority of the
members of a committee of independent directors established for such
purpose; (iii) upon the exercise of the Warrants; (iv) upon the
issuance of Draw Down Shares (as defined in the Stock Purchase
Agreement) pursuant to the Stock Purchase Agreement; or (v) upon
issuance of shares of Common Stock in a firm commitment underwritten
public offering (excluding a continuous offering pursuant to Rule 415
under the Securities Act).
(c) Subdivision or Combination of Common Stock. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(e) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure
that the provisions of this Section 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless (i) prior to the consummation
thereof, the successor or acquiring entity (if other than the Company) and, if
an entity different from the successor or acquiring entity, the entity whose
capital stock or assets the holders of the Common Stock of the Company are
entitled to receive as a result of such consolidation, merger or sale or
conveyance assumes by written instrument the obligations under this Warrant
(including under this Section 4) and the obligations to deliver to the holder of
this Warrant such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the holder may be entitled to acquire and (ii) the
entity whose capital stock or assets the holders of the Common Stock of the
Company are entitled to receive as a result of such transaction is a publicly
traded corporation whose common stock is listed for trading on a Principal
Market (as defined in the Stock Purchase Agreement).
(f) Distribution of Assets. In case the Company shall declare
or make any distribution of its assets (including cash) to holders of Common
Stock as a partial liquidating dividend, by way of return of capital or
otherwise, then, after the date of record for determining stockholders entitled
to such distribution, but prior to the date of distribution, the holder of this
Warrant shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock subject hereto, to receive the amount of
such assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.
(g) Notice of Adjustment. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in each such
case, the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at such price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the chief financial officer of the Company.
(h) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(i) No Fractional Shares. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant. If the exercise of this
Warrant would result in a fractional share of Common Stock, such fractional
share shall be disregarded and the number of shares of Common Stock issuable
upon exercise of the Warrant shall be rounded up to the next higher number of
shares.
(j) Other Notices. In case at any time:
-------------
(i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out
of retained earnings) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of
stock of any class or other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or
merger of the Company with or into, or sale of all or substantially all
its assets to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.
(k) Certain Events. If any event occurs of the type
contemplated by the adjustment provisions of this Section 4 but not expressly
provided for by such provisions, the Company will give notice of such event as
provided in Section 4(g) hereof, and the Company's Board of Directors will make
an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the rights of the
holder shall be neither enhanced nor diminished by such event.
(l) Certain Definitions.
(i) "Common Stock Deemed Outstanding" shall mean the
number of shares of Common Stock actually outstanding (not including
shares of Common Stock held in the treasury of the Company), plus (x)
pursuant to Section 4(b)(i) hereof, the maximum total number of shares
of Common Stock issuable upon the exercise of Options, as of the date
of such issuance or grant of such Options, if any, and (y) pursuant to
Section 4(b)(ii) hereof, the maximum total number of shares of Common
Stock issuable upon conversion or exchange of Convertible Securities,
as of the date of issuance of such Convertible Securities, if any.
(ii) "Market Price," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock
on the Nasdaq National Market ("Nasdaq") for the five (5) trading days
immediately preceding such date as reported by Bloomberg Financial
Markets or an equivalent reliable reporting service mutually acceptable
to and hereafter designated by the holder of this Warrant and the
Company ("Bloomberg"), or (ii) if Nasdaq is not the principal trading
market for the shares of Common Stock, the average of the last reported
sale prices on the principal trading market for the Common Stock during
the same period as reported by Bloomberg, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the
Market Price shall be the fair market value as reasonably determined in
good faith by (a) the mutual agreement of the Board of Directors of the
Company and a majority-in-interest of the holders of the outstanding
Warrants or (b) if the Board of Directors of the Company and a
majority-in-interest of the holders of the outstanding Warrants are
unable to agree pursuant to the preceding clause (a), an independent
investment bank or a "Big Five" independent public accounting firm, in
either case, of nationally recognized standing in the valuation of
businesses similar to the business of the Company, and mutually
acceptable to a majority-in-interest of the holders of the outstanding
Warrants and the Company. The manner of determining the Market Price of
the Common Stock set forth in the foregoing definition shall apply with
respect to any other security in respect of which a determination as to
market value must be made hereunder.
(iii) "Common Stock," for purposes of this Section 4,
includes the Common Stock and any additional class of stock of the
Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this
Warrant shall include only shares of Common Stock in respect of which
this Warrant is exercisable, or shares resulting from any subdivision
or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Section 4(e) hereof, the stock or other
securities or property provided for in such Section.
5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
7. Transfer, Exchange, and Replacement of Warrant; Issuance of Warrant
Shares.
(a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Section 7(e) below, provided, however, that any transfer or assignment shall be
subject to the conditions set forth in Sections 7(f) and 7(g) hereof and to the
applicable provisions of the Stock Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Section 8 are assignable only in accordance with the provisions of that certain
Registration Rights Agreement, dated as of December 7, 2000, by and among the
Company and RGC (the "Registration Rights Agreement").
(b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Section 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder, each of such
new Warrants to represent the right to purchase such number of shares as shall
be designated by the holder hereof at the time of such surrender.
(c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Section 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 7.
(e) Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
(f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such exercise, transfer, or exchange, (i)
that the holder or transferee of this Warrant, as the case may be, furnish to
the Company a written opinion of counsel, which opinion and counsel are
acceptable to the Company, to the effect that such exercise, transfer, or
exchange may be made without registration under said Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the transferee be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act; provided that no
such opinion, letter or status as an "accredited investor" shall be required in
connection with a transfer pursuant to Rule 144 under the Securities Act. The
first holder of this Warrant, by taking and holding the same, represents to the
Company that such holder is acquiring this Warrant for investment and not with a
present view to the distribution thereof.
(g) Restrictive Legend. Until such time as the Warrant Shares
have been registered for resale by the holder under the Securities Act as
contemplated by the Registration Rights Agreement or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, the certificates
representing the Warrant Shares shall bear a restrictive legend in substantially
the following form (and a stop transfer order may be placed against transfer of
the certificates for such Warrant Shares):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities may not be sold, transferred or assigned in the
absence of an effective registration statement for the
securities under said Act, or an opinion of counsel in form,
substance and scope reasonably acceptable to the Company, that
registration is not required under said Act or unless sold
pursuant to Rule 144 under said Act."
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Warrant
Shares upon which it is stamped, if, unless otherwise required by applicable
state securities laws, (a) such Warrant Shares are registered for resale by the
holder under an effective registration statement filed under the Securities Act
or otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
or (b) such holder provides the Company with an opinion of counsel, in form,
substance and scope reasonably acceptable to the Company, to the effect that a
public sale or transfer of such Warrant Shares may be made without registration
under the Securities Act and such sale or transfer is effected, or (c) such
holder provides the Company with reasonable assurances that such Warrant Shares
can be sold pursuant to Rule 144. The holder agrees to sell all Warrant Shares
(including those represented by a certificate(s) from which the legend has been
removed) in compliance with applicable prospectus delivery requirements, if any.
8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.
9. Major Transaction Redemption. If at all times during the period
beginning thirty (30) Trading Days prior to the date of the Major Transaction
Redemption Notice (as defined below) and ending on the Major Transaction
Redemption Date (as defined below) all of the shares of Common Stock issuable
upon exercise of this Warrant are then (x) authorized and reserved for issuance,
(y) registered for resale under the Securities Act by the holder and sales of
such shares may be made thereunder (or such shares may otherwise be resold
publicly without restriction (including, without limitation, as to volume)) and
(z) eligible to be traded on a Principal Market (as defined in the Stock
Purchase Agreement), then, in the event the Company publicly announces its
intention to consummate a Major Transaction (as defined below), the Company
shall have the right to deliver written notice to the holder of its intention to
redeem this Warrant in accordance with this Section 9. Any notice (the "Major
Transaction Redemption Notice") of redemption hereunder (a "Major Transaction
Redemption") shall be delivered to the holder at its registered address
appearing on the books and records of the Company and shall state (1) that the
Company is exercising its right to redeem this Warrant and (2) the date of
redemption (the "Major Transaction Redemption Date"), which date shall be (A) at
least sixty (60) Trading Days after the date of delivery of the Major
Transaction Redemption Notice and (B) the date of consummation of the Major
Transaction. In the event that the Major Transaction Notice is delivered to the
holder but the Major Transaction is not consummated, the Major Transaction
Notice shall be deemed to be withdrawn as to such holder. On the Major
Transaction Redemption Date, the Company shall make payment of the Major
Transaction Redemption Amount (as defined below) to or upon the order of the
holder as specified by the holder in writing to the Company at least one (1)
business day prior to the Major Transaction Redemption Date. If the Company
exercises its right to redeem this Warrant pursuant to this Section 9, the
Company shall make payment to the holder of an amount in cash (the "Major
Transaction Redemption Amount") equal to the aggregate Black-Scholes Amount (as
defined below) for the number of shares of Common Stock subject to this Warrant.
Notwithstanding notice of a Major Transaction Redemption, the holder shall at
all times prior to the Major Transaction Redemption Date maintain the right to
exercise this Warrant at the Exercise Price then in effect (including any
adjustments pursuant to Section 4) and any portion of this Warrant so exercised
after receipt of a Major Transaction Redemption Notice and prior to the Major
Transaction Redemption Date set forth in such notice and payment of the
aggregate Major Transaction Redemption Amount shall be deducted from the number
of Warrants which are otherwise subject to redemption pursuant to such notice.
"Major Transaction" means a consolidation or merger of the Company with or into
any other corporation or entity (other than a merger in which the Company is the
surviving or continuing corporation and its capital stock is unchanged) or the
sale or transfer of all or substantially all of the assets of the Company, in
each case where the consideration for such transaction consists entirely of cash
or in which the entity whose capital stock or assets the holders of Common Stock
are entitled to receive as a result of such Major Transaction is not a publicly
traded corporation (i.e., the common stock of such corporation is not traded on
a Principal Market (as defined in the Stock Purchase Agreement)). "Black-Scholes
Amount," as of any date, means the amount determined by calculating the
"Black-Scholes" value of an option to purchase one share of Common Stock on the
applicable page on the Bloomberg online page, using the following variable
values: (i) the current market price of the Common Stock equal to the closing
trade price on the last trading day before the Major Transaction Redemption
Date; (ii) volatility of the Common Stock equal to the volatility of the Common
Stock during the 100-Trading Day period preceding the Major Transaction
Redemption Date; (iii) a risk free rate equal to the yield of the United States
treasury bill or treasury note with a maturity corresponding to the remaining
term of the Warrants on the Major Transaction Redemption Date; and (iv) an
exercise price equal to the Exercise Price on the Major Transaction Redemption
Date. In the event such calculation function is no longer available utilizing
the Bloomberg online page, such calculations shall be made using the closest
available alternative mechanism and variable value to those available utilizing
the Bloomberg online page for such calculation function.
10. Notices. All notices, requests, and other communications required
or permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 8065 Leesburg Pike, Suite
400, Vienna, Virginia 22182, Attention: General Counsel, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Section 10, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.
11. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN
DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.
12. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the holder
hereof.
(b) Descriptive Headings. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.
(c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock.
(d) Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder of this
Warrant by vitiating the intent and purpose of the transactions contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Warrant will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Warrant, that the holder of this Warrant shall be entitled, in addition to
all other available remedies in law or in equity, to an injunction or
injunctions to prevent or cure any breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions of this Warrant, without
the necessity of showing economic loss and without any bond or other security
being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
TELIGENT, INC.
By: /s/ Alex J. Mandl
____________________________________
Alex J. Mandl,
Chief Executive Officer
Dated as of December 7, 2000
<PAGE>
FORM OF EXERCISE AGREEMENT
Dated: ___________, 2000
To: Teligent, Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:
Name: __________________________
Signature: __________________________
Address: __________________________
__________________________
__________________________
Note: The above signature should
correspond exactly with the
name on the face of the within
Warrant.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
Name of Assignee Address No of Shares
---------------- ------- ------------
, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said Warrant
on the books of the within-named corporation, with full power of substitution in
the premises.
Dated: ________ __, 200_
In the presence of:
-------------------------
Name: __________________________
Signature: __________________________
Title of Signing Officer or Agent (if
any):
Address: __________________________
__________________________
__________________________
Note: The above signature should
correspond exactly with the
name on the face of the within
Warrant.
